THREE hundred and fifty delegates from 70 countries met in
Cape Town this week at the Global Policy Forum (GPF) to see whether they could
do a better job in providing financial services to the poor throughout the
This, I feel, is a highly significant gathering and I hope
the results of the meeting will not be dismal, with participants failing to
agree on important commitments.
I also hope the gathering won't set yet another set of
aspirational targets that will mean little if countries decide to disregard
Let us talk about the gathering itself first. This was GPF's
fourth meeting and was hosted by South Africa's National Treasury and the
Alliance for Finance Inclusion (AFI), a global network of financial
policymakers from developing and emerging countries. AFI was founded in 2008.
The first two meetings did not lead to any tangible
commitments, prompting many to think it was another talk shop.
But last year the forum - held in Mexico - launched the Maya
Declaration, which was the first set of global measurable financial inclusion
commitments by developing and emerging countries.
This year's GPF will try to demonstrate commitment to
financial inclusion with Cape Town additions to the Maya Declaration. Countries
have been given an opportunity to commit to outcomes that will lead to real
AFI says financial inclusion is about ensuring that low
income households have greater access to financial services, and encouraging
financial institutions to provide these services at affordable prices.
According to AFI, access to appropriate and affordable
banking, credit, saving and insurance services help the poor to raise and
protect their standard of living.
It adds that increasing access to formal financial services
for individuals, households and small, micro and medium enterprises (SMMEs) has
substantial benefits for the economy, including job creation and increasing
productive economic capacity, leading to the empowerment of disadvantaged
I want to state upfront that South Africa still has a long
way to go in financial inclusion. Granted, a lot of work of has been done in
South Africa, but last year the country had a little more than 9 million
financially excluded adults.
Finance Minister Pravin Gordhan told delegates at the
meeting this week that because of the low-cost Mzansi account, more than 3
million people opened bank accounts in SA.
This, he said, meant that the percentage of the population
with access to financial services rose to 63% in 2011 from 47% in 2008.
But I fear using the Mzansi account as a sign of financial
inclusion is not a true reflection of what is happening on the ground; it is
well known that most of these accounts are lying dormant with account holders
failing to use them.
South Africa cannot claim to have succeeded in financial
inclusion when people are unable to use the services that have been made
accessible to them. What is the point of having an Mzansi account when you
cannot use it?
The Mzansi accounts were mostly opened by shebeen owners,
spaza shop owners and many other members of the informally served market.
This market has seen an increase in financial exclusion
because people in this market keep money in a safe place at home. If they want
funds, they borrow from family and friends.
There is no doubt that the number of financially excluded
people could increase next year because of growing concerns around South
Africa’s banking fees, which are among the highest in the world.
Lastly, as the world faces another recession many people
will lose their jobs and it will be hard for them to be included financially.
This is going to affect South Africa and many other countries which
participated in this gathering.
Let us hope this meeting come up with clever strategies
around financial inclusion this afternoon when the gathering comes to an end.
It should also bear the emerging global recession in mind.
*Mzwandile Jacks is a freelance journalist.
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